We Don't Know if Obamacare Is Working Well. But We Know It's Working.

December 29, 2013

Obamacare got off to a lousy start. But things are looking a lot better now.

Nearly a million people signed up for private health plans via healthcare.gov in December, according to statistics the Obama Administration released on Sunday morning. That pushed the total number of sign-ups for the year to 1.1 million. Combined with the totals that states are likely to report by year’s end, it probably means more than 2 million people have signed up for private health insurance though the Affordable Care Act’s marketplaces. That doesn’t count several million who enrolled in Medicaid, the newly expanded federal-state program that provides insurance to low-income people.

The official enrollment number doesn’t tell us many things. It doesn’t tell us whether these people getting private (or public) coverage had insurance previously—or, if they had insurance, how much they were paying for it. It doesn't tell us how many of these people have actually paid premiums, which is essential for coverage to take effect. It doesn’t tell us whether insurers have proper data on these people or what kind of access and protection the new coverage will give. It doesn’t tell us how many of the enrollees are in relatively good health or how many are in relatively poor health—or how that mix will affect insurance prices going forward.

In addition, the numbers do not appear to match the Administration’s own targets. According to internal projections, later reported by the Associated Press, officials expected more than 3.3 million enrollments by year’s end, with about 1.8 million of those coming through the federal website.

For all of those reasons, and a few others, it’s premature to say Obamacare is meeting expectations.

But those internal enrollment targets don't include people who signed up for coverage directly through insurers. And while lower-than-predicted enrollment could be a sign consumers don’t like the new policies, they could also represent the lingering effects of the site’s technical problems. The internal projections were never particularly scientific: Administration officials extrapolated them from the Congressional Budget Office's projection of overall private plan enrollment in 2014 (about 7 million) and with necessarily imperfect data from prior programs. "What’s important now is that the systems are mostly functioning so that anyone who wants to get coverage can," says Larry Levitt, senior vice president at the Kaiser Family Foundation. "The outreach campaigns and advertising by insurers likely haven’t peaked yet, so I wouldn’t be at all surprised if enrollment in March is even bigger than December."

MIT economist Jonathan Gruber, an architect of reforms, has a similarly nuanced take. "Given the technical problems at the start, and given that the important deadline is March 31, what matters right now is the trend in enrollment. In terms of overall enrollment, the trend looks quite good," Gruber says. "What matters more is the mix in terms of the health of those enrolling, and we won't have a clear answer on that until we see 2015 rates from insurers."

While we wait to see more numbers—and parse the meaning of the numbers we have—we do know a few things for sure.

We know, first and foremost, that healthcare.gov is a (mostly) functioning website. This was no sure thing even a few weeks ago. At the end of November, when officials announced that they had met their goal of constructing a website that worked well for most customers, they were cautious to warn about future problems. Partly that was because their previous predictions of success proved so unbelievably wrong. And partly that was because they feared a late surge of customers would overwhelm the site’s capacity, threatening a whole new period of chaos. But the system held up just fine, as the high enrollment numbers indicate.

More important, we know that many of the people getting insurance are very, very happy to have it. In the fall, when insurers began sending notices of rate increases and plan cancellations, all we heard about was people unhappy with—and in many cases angry about—their new options. Now, however, we are increasingly hearing stories about people who are saving money and, in some cases, getting access to health care they’ve desperately needed for a long time.

Adam Peterson’s life is about to change. For the first time in years, he is planning to do things he could not have imagined. He intends to have surgery to remove his gallbladder, an operation he needs to avoid another trip to the emergency room. And he’s looking forward to running a marathon in mid-January along the California coast without constant anxiety about what might happen if he gets injured.

These plans are possible, says Peterson, who turned 50 this year and co-manages a financial services firm in Champaign, Ill., because of a piece of plastic the size of a credit card that arrived in the mail the other day: a health insurance card. …

Dan Munstock knows this. A 62-year-old retiree in Greenville, Tenn., he hasn’t had insurance since he left his job as a crisis counselor in Miami six years ago. He lives on Social Security income of less than $15,000 a year. Although he does not know of any major ailments, he would like a checkup because, he said, “you can seem fine until the day you drop over with something.”

Like thousands of other Americans, Munstock ran into technical problems with the federal Web site before managing to pick a health plan Dec. 1. He qualified for a federal subsidy to help him afford the insurance, so he has to pay just $87.57 a month toward his premium. After his welcome packet from Blue Cross Blue Shield of Tennessee arrived in the mail, Munstock was so eager to finish the process of enrolling and getting an insurance card that he picked up the phone to pay the first premium instead of using the mail.

“It felt really good,” he said. Paying toward his own insurance, he said, gives him “a certain dignity,” a feeling that he is not “one of the takers.” The next day, he called the doctor’s office. His appointment for a physical is Jan. 2. …

Like the stories of rate hikes and plan cancellations, anecdotes of people gaining insurance or saving money will frequently prove more complicated than they seem at first blush. Some people will discover they owe more out-of-pocket costs than they imagined, because of high deductibles and co-payments. Some won’t be able to see the doctors they want, because plans have limited networks of providers. Some will haggle with insurers over particular bills or services. And that’s not to mention the many other trade-offs in the law—like higher taxes on the wealthy, cuts to various industry groups, higher premiums for some people buying their own coverage, and other steps that made possible the law’s expansion of health insurance.

But nobody ever promised that Obamacare would solve all of the health care system’s ills—or that it would come without costs of its own. The goal has always been to make insurance more widely available, so that more people had access to care and protection from crippling medical bills, while beginning the difficult work of reengineering medical care to make it more efficient. The new enrollment numbers should give us new reason to think it will.